Wholesale prices fall, keeping inflation steady

Chronicle News Services

Published 4:00 am, Thursday, January 19, 2012

Photo: Steve Helber, Associated Press

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In this Jan. 26, 2011 photo, welders spot-weld parts on a door frame at the Volvo truck assembly line at the Volvo plant in Dublin, Va. Factory output rose for a third straight month in September, a sign the economy is growing slowly. Manufacturers made more airplanes, trucks and home electronics to meet rising demand. (AP Photo/Steve Helber) less

In this Jan. 26, 2011 photo, welders spot-weld parts on a door frame at the Volvo truck assembly line at the Volvo plant in Dublin, Va. Factory output rose for a third straight month in September, a sign the ... more

Photo: Steve Helber, Associated Press

Wholesale prices fall, keeping inflation steady

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EARNINGS

Kinder Morgan profit rises 16%

Net income rose to $475 million (51 cents per unit) from $409 million (42 cents) a year earlier, the Houston company reported Wednesday. Excluding certain legal and insurance expenses, asset sales and financial contracts, the company earned 6 cents less than the average of 15 analysts' estimates compiled by Bloomberg.

Revenue rose 4 percent to $2 billion from $1.93 billion a year earlier. Kinder Morgan's gas-pipeline business shipped 11 percent more compared with the same period in 2010 after a new line opened in the Fayetteville Shale field and the company acquired a gathering system in the Haynesville field, according to the statement. Shipments of gasoline and other refined products fell 2.6 percent.

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Wholesale falls on food, energy

Wholesale prices fell last month because companies paid less for food and energy, evidence that inflation remains tame.

The Labor Department said Wednesday that the producer price index, which measures price changes before they reach consumers, declined 0.1 percent in December. That follows a 0.3 percent rise the previous month and is the second drop in three months.

Excluding volatile food and energy costs, core wholesale prices rose 0.3 percent. It was the largest increase in five months. Higher prices for pickup trucks, cars and pharmaceuticals drove the increase.

Big gain for factory output

U.S. factory output surged in December by the most in a year. Stronger demand for business equipment, vehicles and energy offered the most visible evidence that manufacturing has roared back from the depths of the recession.

The Federal Reserve said Wednesday that manufacturing increased 0.9 percent in December, the biggest gain since December 2010. And the overall output of the nation's factories, mines and utilities grew 0.4 percent in December. Warm weather dampened demand for energy produced by utilities.

Industrial output is less than 5 percent below its pre-recession peak, reached in September 2007. It has increased more than 14 percent since hitting a recession low in June 2009.